Other Factors

In addition to abihty, intensity of work, and occupation, other factors affect the inequality of wage earnings.
We saw in Chapter 13 that discrimination and exclusion from certain occupations have played an important role in keeping down the incomes of women and many minority groups. In addition, the home life and community experience of children have a major impact on later earnings. Children of the affluent benefit from their environment at every stage. A child of poverty often ‘ experiences crowding, poor nutrition, run-down schools, and overworked teachers. The scales are tipped against many inner-city children before they are 10 years old.

Some economists believe that. changing technology, immigration, international trade, and the increasing prevalence of winner-take-all markets are creating greater inequality. To take the first-of these, recall Chapter II’s discussion of how technology is leveraging individual performance so that it reaches many more people. As a result, while talented made little more than the average factory worker three decades ago, signing bonuses for basketball’s free agents today are approaching $100 million. Similar trends are seen in other
sports, in entertainment, and in salaries of corporate officers.